I share your hope in the “alternative”, however I fail to see anyone who has his ear who will convince him to take the painful but necessary steps toward deleveraging, i. e. marking to market, transparency and prosecution. Without these we are going nowhere but down a bigger hole. It’s time to start listening to someone other than those who have caused and profited from the “leveraging” phase. It is one thing to say everything is possible in America and another thing to face the stark reality that some things are not at all possible in America. Namely, America can’t spend more than it produces and failing that, it cannot print fiat money in an attempt to “pay” for its near certain bankruptcy, especially when the “print” results in a direct transfer from producers to stealers. I voted for Obama because I thought he would have the best chance of quelling the civil disorder that will result from our failure to face our financial problems transparently and justly. When the unemployed are told the only thing left to eat are credit default swaps, the lethargy will come to a screeching halt. I listen to his every word and read between the lines for hints that he understands, but so far he is doing what every financially naïve person would do…..follow the advice of the geniuses who caused the problem in stimulating by all means necessary such that the only failure would be failing to stimulate sufficiently. Were it mathematically possible I would be all for it, but that is a black hole that should be replaced by deleveraging, transparency and prosecution. If Henry Paulson was hauled into jail the unemployed might at least feel some sense of justice. As a matter of information, I was a guest of a congressman at the July 10th House Financial Services Committee hearing, wrote some questions for the HFSC, got a question asked which included a visual on the wall of the Fed balance sheet. I was sitting about 15 feet away when Paulson explained to the world how soundly Fannie and Freddie were capitalized and that it was a testimony to the private sector how they were committing capital. This was followed by Bernanke claiming that, although he had the sole power to monetize without limits, he was not presently doing so. The question was: “How will you handle the next financial crisis since there are only $21 billion of lendable assets (treasury bills) on your balance sheet and if necessary, will you monetize and to what extent?”

I was glad that Obama made some nods to reason and empiricism. I would've liked something more emphatic and specific along those lines, but after the last eight years of yahoo government*, I'll take what I can get.

Still, while I absolutely hope the man can deal, the extreme hope that many (though far from all) seem to be placing on him makes me nervous. However talented Obama is, there's deep institutional rot in this country. I fear a crashing wave of disappointment -- followed, perhaps, by the revival of a Republican party even more pathological than the one we've already got.

I hope we can see more sane and measured expectations.-- sglover

* The cryptic guy(s?) over at the "Stiftung Leo Strauss" blog have an excellent name for what the Republican Party represents: Christian Socialist Authoritarianism.

I'll for him...Cut military spending...close overseas bases...cut medicare and social security benefits...shut down the department of education...dept of homeland security...could go on and on...government spending maked up 50 percent of our gdp. Things that can't go on don't. If we did all cut back on the government bubble before it stops then we could spend more money on production and research. That is how you spend less while producing more.

taxes = what is extracted from production of the private sector. surplus = spending less than what was extracted. Granted, since we have gotten away with living beyond our means for quite a long time, most Americans may think this is "normal", but they are in for a rude awakening.

I watched it all. I cried. I think I understand the huge problems he is facing. I know that he does not walk on water. I do believe that he is intelligent, calm, wants to be president of all of us, not just Democrats, puts qualified people in important positions, and will try to do his best. That is all we can ask.

And in my mind, that is a change from what we have had in the last eight years.